A unit in Darwin with a $1.19 million plus price tag. Darwin was one of only two capital cities to experience price growth in May. Picture: realestate.com.auSource:Supplied

Darwin and Canberra were the only capital cities not to record a drop in values in May.

Despite the fall in the past month the figures revealed values are still up nationally by 0.7 per cent in the past three months.

RP Data research director Tim Lawless says the drops in values are most likely caused by seasonal influences.

“But (it) may also be indicative of a broader trend towards cooler housing market conditions,’’ he says.

“Historically, housing market conditions have softened in April and May as the market rebalances from what is typically a seasonally strong first quarter and also as a result of cooler climatic conditions during the autumn and winter months.’’

Despite drops in values Sydney is still one of the most expensive markets in Australia with a $7.5 million price tag attached to this Bathurst St unit. Picture: realestate.com.auSource:Supplied

Mr Lawless says he has also noticed signs of the housing market approaching or hitting the peak of its growth cycle.

He says with affordability becoming more “challenging” and rental yields reducing in Australia’s two largest cities, Sydney and Melbourne, he wouldn’t be surprised if growth slowed more throughout the year.

During the quarter Darwin was the best performing capital city with its housing values up by 5.5 per cent.

Melbourne was the weakest with its values down by 1.9 per cent.

Sydney continues to have the highest median dwelling price in Australia of $678,500, while Hobart has the cheapest of $345,000.

A home for sale at 134 Melville St, Hobart is for offers between $395,000 and $435,000. Picture: realestate.com.auSource:Supplied